Volatility Makes Forecasting A Gamble

I’ll be the first to admit that Canada pulled out of last year’s recession a lot faster than I expected and certainly better than the United States, which seems to sink in deeper every time it appears to be pulling itself out of its economic quagmire.

The U.S. situation is just one of the mixed economic signals that make 2010 and perhaps beyond a confusing time here in Canada, where we rely heavily on our neighbour as our biggest trading partner.

Add that to volatile economies in places such as Europe, which we’ve discussed in previous blogs, and there is cause to be at least somewhat wary, even if the preferred action is to wrap ourselves in the cocoon of good fortune that many of us in the golf industry have enjoyed this year.

With its reliance on discretionary spending, it is prudent to keep an eye on what’s happening outside of our fairways and greens, where some are in their happy places.

Talking to GNN blogger Kevin Thistle last week, he says Coppinwood near Uxbridge, Ont., had a banner July thanks to a spike in new members who support the pro shop and food and beverage operation. Kevin will get into that a little more in a blog later this week.

Just when you start to breathe a sigh of relief that perhaps this signals the end of the past few years in which the economy and weather has affected golf negatively, you get news that Canada lost 139,000 full-time jobs in July and that the unemployment rate had edged back up to eight per cent.

How that will affect Coppinwood specifically is probably minimal, but you have to think that golf as a whole will feel some kind of an effect. On the other hand, the country added 93,000 jobs the month before, so which number tells the real story about the economic recovery?

When a trend is figured out, it could affect what the Bank of Canada does with interest rates, which could also affect our golf businesses, but again, it’s too uncertain to tell although the general feeling is that rates will rise next month.

In British Columbia and Ontario, there was concern that the implementation of the Harmonized Sales Tax could tip those provinces back into recession and while that has yet to be proven, it is interesting to note that the HST now affects resale homes and in Toronto, sales dropped 34 per cent in July.

Like the unemployment figures, the housing market could be a one-month blip or the beginning of a trend that’s forming. For golf’s sake, let’s hope it’s the former and not the latter, but either way, it will influence how Canadians will use their discretionary funds either positively or negatively. The volatile stock market of late could influence how people spend, as well.

This uncertainty comes at a time when golf operators are starting to do their forecasts for 2011, which makes it important to look beyond their realms and into the bigger world for trends that are forming that will affect their businesses.